BOSTON (CBS) – There are thousands of mutual funds to choose from and you will need a disciplined process to whittle down the number to something that is manageable. This process will work even if you are just choosing among the funds in your retirement plan.

You want to think long term. Therefore, it is worth taking some time to select your funds. Start with Morningstar to begin your research. Morningstar is a mutual fund rating company. Look for:

A fund manager with a good 5 and 10 year performance record; you may need to settle for a 3 and 5 year record. You are interested in the comparative performance over 3, 5 and 10 year period. One-year ratings are not very meaningful.

Check out the expense ratio. You want an average or lower than the average expense ratio. Fees and expenses can make a huge difference in your return over the years. These dollars are taken out of the mutual fund whether the fund makes money or loses money.

Next, a lower than average annual turnover ratio. Turnover increases expenses as the manager buys and sells securities. The idea is that the manager sells something at a high price and buys something else at a better value. As long as this works you come out ahead. You’ll find that growth funds, especially small-cap growth funds have the highest turnover rate. Compare each fund’s annual turnover ratio with other funds in the same style category.

Search for a low Beta. Volatility is measured by a statistical tool called Beta that represents how much a fund or a stock moved up and down compared to the stock market over short periods in the past, usually a year. The market’s volatility is represented by a beta of 1.0.

The minimum investment required? Funds have widely varying minimums, $1,000 to $100,000. The minimums are often waived for retirement plans or IRAs.

Once you have the universe of funds narrowed down using the guidelines above, you probably still have more funds than you need. Take your search one step further and look at the ease of purchasing the funds.

Can you use one of the supermarkets like Fidelity or Schwab or does one fund family fit your needs in the beginning? You want to be sure what ever fund family you choose that there is a money market fund available. Selling your fund or transferring the fund will be so much easier if you have a money market fund to use as a holding place.

One more thing: Money magazine and Kiplinger’s Personal Finance magazine almost always have articles about mutual funds they would recommend. Check them out at your local library. The library may also have some other tools you can use in your research such as financial newsletters and newspapers such as the Wall Street Journal and Barrons. Many libraries also have Value Line, a stock analysis newsletter.

Dee Lee

Dee Lee is a Certified Financial Planner who received a diploma in Financial Planning from Boston University and her MBA from Simmons College. She dissolved her successful financial planning practice for individuals so that she could devote all of...